After Kotak Mahindra Bank, Yes Bank and others, mortgage firm Housing Development Finance Corporation (HDFC) has raised Rs 14,000 crore and Axis Bank mopped up Rs 10,000 crore through a qualified institutional placement (QIP) of equity shares. With this, private banks have now raised close to Rs 52,000 crore from the market.
ICICI Bank, which launched its QIP issue Tuesday to raise up to Rs 15,000 crore, has reportedly received bids worth around Rs 62,000 crore from investors. It has set a floor price of Rs 351.36 per share.
Kotak Mahindra Bank had raised Rs 7,442 crore through a QIP issue in May. Yes Bank had raised Rs 14,267 crore recently, short of its target of Rs 15,000 crore.
Public sector banks, led by State Bank of India, are planning to raise a huge amount from the market in the coming months. Almost all leading banks have announced plans to raise capital to beef up their balance sheets and make provisioning.
Banks are at the frontline of being adversely impacted from the pandemic as economic contraction reduced corporate earnings and individual incomes, reducing the capacity to repay debts.
According to HDFC, it has allotted 5.68 crore equity shares of face value of Rs 2 each at an issue price of Rs 1,760 per equity share. The issue price represents a discount of 1 per cent to the closing price of its equity shares on the exchanges prior to the launch of the issue. HDFC had also raised Rs 3,693 crore through non- convertible debentures (NCDs).
Meanwhile, a committee of whole-time directors of Axis Bank decided to close the QIP issue on Monday and gave its nod for the issue of 23.80 crore equity shares of Rs 2 each of the bank at a price of Rs 420.10 per equity share. The issue price is at a discount of 5 per cent to the floor price of Rs 442.19 per equity share for an aggregate value of Rs 10,000 crore.
HDFC said it has received Rs 307.03 crore upfront through the issue and allotment of 1.70 crore warrants at an issue price of Rs 180 per warrant. The warrants entitle the warrant holder to exchange each warrant for one equity share of HDFC at any time over the next three years i.e. until August 10, 2023, at a pre-agreed price of Rs 2,165. “The warrant issue price together with the warrant exercise price represents a premium of 32 per cent to the closing price of the corporation’s equity shares on the BSE/NSE prior to the launch of the issue,” the housing financier said.
HDFC also raised an amount of Rs 3,693 crore through the issue of redeemable NCDs at par for a tenor of 3 years, carrying an annualised coupon rate of 5.40 per cent per annum. “The issue has been oversubscribed overall. The equity shares and warrants offered in the QIP have been subscribed to by 326 diverse marquee institutional funds,” it said.
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